Netscape, maker of the pioneering browser felled by Internet Explorer, was bought by AOL in 1999 and settled its lawsuit against Microsoft in 2003. Antitrust victim Sun Microsystems Inc., whose co-founder cheerfully derided Windows as a bug-prone "hairball" until the act grew stale, did the same.
Silicon Valley has always cared more about the future than the past, which helped mend the rift. Microsoft also worked hard to make friends. In the late 1990s, it opened a Mountain View campus just three exits up U.S. 101 from Yahoo's Sunnyvale headquarters and staffed it with Valley insiders.
In October, Microsoft's courtship of Silicon Valley helped it land an advertising deal with social-networking darling Facebook Inc. Microsoft also made a $240-million equity investment in Facebook.
The rise of Google has triggered a realignment of power, a testament to the belief that few companies can stay on top for long. Microsoft is viewed as an aging dictator, potentially lethal but up against a formidable foe.
"There is a real awareness that the game has changed and Google is setting the trends," Intertrust's Shamoon said. "It's like one of those cartoons: Our weapons don't work on it."
In some corners of Silicon Valley, Microsoft will always be the evil empire, the power-mad monopolist willing to crush its competition.
"Everyone sees Microsoft as the devil incarnate," said Daniel Sorrentino, an analyst at an Internet advertising company. "There's concern that this is going to give Microsoft too much control of the Internet."
Some Web users have pledged to stop using Yahoo as their home page if it accepts Microsoft's offer. A small group posted anti-Microsoft images on Flickr, Yahoo's photo-sharing website, and declared it wouldn't use it anymore -- although others said the same thing when Yahoo bought Flickr in 2005.
"You'll never see anything good come out of Yahoo again," said Kyle Setrum, a Silicon Valley software engineer.
Others said Yahoo had already lost its innovative edge.
"Here is a company with so much potential -- one of the pioneers -- that ends up losing its way, wanders in the desert and then gets bought by, of all companies, Microsoft," said Gary Reback, the Silicon Valley antitrust lawyer who persuaded the Justice Department to go after Microsoft. "There's a bit of emotion, but it's mitigated by the circumstance."
Randy Komisar, a partner at top venture capital firm Kleiner, Perkins, Caufield & Byers, which helped bankroll Sun, Netscape and Google, also shrugged off the old enmity.
"The parochial emotions about the various players seem sophomoric," he said.
For Microsoft, the biggest concern could be the feelings inside Yahoo, where it would have to motivate the best employees to stay with a company that a decade ago was Silicon Valley's Public Enemy No. 1.
"Inside its four walls, Yahoo has always defined itself in the same competitive set as start-ups and innovators like Facebook, YouTube and Google," said a former Yahoo executive who spoke on condition of anonymity.
"So to end up, after all that fighting, as part of Microsoft is the total opposite end of the spectrum. And that would be a bummer."
--
michelle.quinn@latimes.com
joseph.menn@latimes.com
jessica.guynn@latimes.com
